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Taxation Laws
Previous Year Question Paper with Solution
LLB 3 years · Sem 4
May 2017 - ATKT Examination
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LLB 3 years Sem 4 Taxation Laws May 2017 - ATKT Question Paper with Solutions
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First published on munotes.in on 24 October 2026.
Published by munotes.in, Mumbai.
Model answers written and edited by the munotes.in editorial desk.
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The University does not publish an official answer key for this paper. The answers in this volume are model answers, written to show how a full-mark answer is built. They are a study aid, not an authority on what an examiner marked.
The question paper reproduced here is the paper as set by the University of Mumbai at the May 2017 - ATKT examination.
The law in these answers is stated as at October 2026. The Income-tax Act, 2025 replaced the Act of 1961 from 1 April 2026; each answer gives the 1961 section the paper asks for, with the 2025 section beside it. No wealth-tax is charged for the assessment year 2016-17 or any later year (section 3(2) of the Wealth-tax Act, as amended in 2015). Since 1 July 2017 the Maharashtra VAT Act covers only liquor and a few petroleum products, and the Central Sales Tax Act six goods; other goods are taxed under the GST Acts of 2017. The central sales tax rate on sales against Form C has been 2 per cent since 1 June 2008, though section 8(1) still prints 3 per cent. The standard deduction from salary, withdrawn from 2005-06 to 2018-19, is now Rs 50,000, or Rs 75,000 under the new regime.
Contents
The questions below are the paper as the University of Mumbai set it at the May 2017 - ATKT examination, in the order it was set.
MarksPage
MarksPage
The Paper as Set
The questions in this volume are the questions asked at the May 2017 - ATKT examination, reproduced as the University of Mumbai set them, in the order it set them. Nothing has been reworded, added or left out. Only the answers are ours. See the original question paper.
Duration 3 hours · Total marks 100 · 25 questions answered
Instructions printed on the paper
- N.B: 1. Answer the questions as per instruction. 2. Figures to the right indicate full marks allotted.
How to use this volume
Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.
Q.1
Q.1: Write short answers, not more than two sentences
20 Marks - 2 marks each
(a)What is "Long Term Capital Asset" under the Income Tax Act?[2]
Answer
Section 2(29AA) of the Income-tax Act, 1961 defines a long-term capital asset as "a capital asset which is not a short-term capital asset". Section 2(67) of the Income-tax Act, 2025 uses the same words. The definition works by exclusion, so the short-term test must be stated.
The short-term test, section 2(42A) (section 2(101) of the 2025 Act). A short-term capital asset is one "held by an assessee for not more than twenty-four months immediately preceding the date of its transfer". A shorter period of twelve months applies to four assets. They are a listed security, a unit of the Unit Trust of India, a unit of an equity oriented fund and a zero coupon bond.
So an asset is long-term when it is held:
- for more than 24 months, in general (land, buildings, unlisted shares, jewellery); or
- for more than 12 months, in the case of listed securities and the units and bonds named above.
Before 23 July 2024 the general period was 36 months.
Counting the period. Explanation 1 to section 2(42A) adjusts the count. The previous owner's period is added for an asset received by gift, will or inheritance. For bonus and rights shares, the period runs from allotment. For shares in a company in liquidation, the period after liquidation is left out.
It must first be a capital asset under section 2(14). Stock-in-trade, personal effects and rural agricultural land are not capital assets at all.
Why it matters. Long-term gains are taxed at 12.5 per cent (section 112). Gains on listed equity are taxed at 12.5 per cent above Rs 1,25,000 a year (section 112A). The reinvestment exemptions in sections 54 and 54EC apply only to long-term gains. Example: listed shares held for 13 months are long-term; unlisted shares held for 20 months are short-term.
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